Pfizer Paid $896 Million in Prempro Settlements

June 19 (Bloomberg) -- Pfizer Inc., the world’s largest
drugmaker, said in a securities filing that it has paid
$896 million to resolve about 60 percent of the cases alleging
its menopause drugs caused cancer in women.

Pfizer has now settled about 6,000 lawsuits that claim
Prempro and other hormone-replacement drugs caused breast
cancer, and it has set aside an additional $330 million to
resolve the remaining 4,000 suits, according to a filing with
the U.S. Securities and Exchange Commission.

The reserve means New York-based Pfizer has committed more
than $1.2 billion to resolving claims that its Wyeth and
Pharmacia & Upjohn units failed to properly warn women about the
menopause drugs’ health risk. Based on the May 10 filing, the
company is paying an average of about $150,000 a case.

“It’s good for the company not to let this litigation
linger,” Les Funtleyder, a New York-based fund manager at
Miller Tabak & Co. in New York who holds Pfizer shares, said
yesterday in a phone interview. “Resolving these cases gives
investors one less thing to worry about.”

More than 6 million women took Prempro and related
menopause drugs to treat symptoms including hot flashes and mood
swings before a 2002 study highlighted their links to cancer.
Wyeth’s sales of the medicines, which are still on the market,
exceeded $2 billion before the release of the Women’s Health
Initiative, a study sponsored by the National Institutes of
Health.

Litigation Scorecard

Until 1995, many menopausal women combined Premarin,
Wyeth’s estrogen-based drug, with progestin-laden Provera, made
by Upjohn, to relieve their symptoms. Wyeth combined the two
hormones in its Prempro pill. Pfizer completed its $68 billion
purchase of Wyeth in 2009.

Pfizer and its units have lost 11 of 21 cases over the
menopause drugs decided by juries since trials began in 2006,
according to data compiled by Bloomberg.

The drugmaker got some of the verdicts against it thrown
out after trial or had the awards reduced. It resolved some of
the verdicts through settlements, while other decisions are on
appeal.

“After nine years of litigation involving this medicine,
we are confident in our medicine, our track record of success in
court where we have won eight of the last 10 final verdicts at
trial, and in our ability to resolve these cases on appropriate
terms,” Chris Loder, a Pfizer spokesman, said in an e-mailed
statement.

10,000 Claims

Pfizer officials said that the $330 million reserve was an
estimate and they couldn’t be sure it would cover the remaining
cases “given the uncertainties inherent in this product
liability litigation,” according to the SEC filing.

At the height of the litigation, Pfizer faced more than
10,000 claims that its menopause drugs caused breast cancer,
according to lawyers for former users. Those cases included more
than 8,000 claims consolidated in federal court in Arkansas and
other suits in state courts in Pennsylvania, Nevada and
Minnesota.

A majority of those cases have been resolved, according to
court and securities filings. A federal judge in Arkansas has
sent other suits back to their home courts for trial. For
example, two were returned to federal court in Connecticut to be
considered by juries.

Punitive Damages

In April, a federal jury in New Haven, Connecticut, ordered
Pfizer to pay at least $4 million in damages to a woman who
developed breast cancer. The panel also ordered Pfizer to pay
punitive damages over its handling of Prempro. A judge is still
weighing how much, if any, to assess in punitives.

Lawyers for Margaret Fraser asked U.S. District Judge Janet
Arterton in a May 29 court filing to award $8 million in
punitive damages to “adequately punish Wyeth for its outrageous
conduct” in connection with the drug. Wyeth is seeking a new
trial in the case and disputes the plaintiff’s request for
punishment damages, according to court filings.

Last month, a separate federal jury in Bridgeport,
Connecticut, found Pfizer wasn’t liable for the breast-cancer
death of a woman who died after taking the company’s menopause
medicines. The panel in that case concluded that Wyeth officials
properly warned Lynn Moss of the drug’s risks.

More Trials

Zoe Littlepage, a Houston-based lawyer who represents women
who haven’t settled their suits against Pfizer, said she’s
preparing for another round of trials over the claims.

“The law firms that are left after these settlements are
eager to see that every woman gets her day in court,”
Littlepage said in an e-mailed statement. “We have worked long
and hard to get these cases to trial.”

Esther Berezofsky, a New Jersey-based lawyer representing
women suing over the menopause drugs, said her clients believe
their claims are worth more than $150,000 average paid in other
cases that settled.

“We’ll consider settling when the company decides to
fairly compensate the women I represent for the horrendous
injuries caused by these drugs,” Berezofsky said in a telephone
interview.

The consolidated case in Arkansas is In re Prempro
Products, 03-cv-015070-WRW, U.S. District Court, Eastern
District of Arkansas (Little Rock).